What Is Cardano (ADA)?

Cardano is a blockchain network, and ADA is the cryptocurrency that runs on it. ADA is an altcoin, meaning any cryptocurrency other than Bitcoin. To see how it fits into the wider group, read our guide to what altcoins are.

This guide does not quote prices, because they change all the time. See the Cardano price and payment options for the current ADA rate.

What is Cardano?

Cardano is a decentralized, proof-of-stake blockchain that handles payments and runs smart contracts. Anyone can use it, and no single company runs the network.

Its development has been led by Input Output Group (IOG, formerly IOHK), the engineering company Charles Hoskinson founded in 2015. Hoskinson is also one of the co-founders of Ethereum. Cardano’s main network went live in September 2017.

Cardano describes itself as the first blockchain platform to grow out of a research-first approach. Its core protocols are based on peer-reviewed academic research. That approach aims to catch design flaws early, but no review process can rule out every bug or attack.

What is ADA used for?

ADA is Cardano’s native coin. It has four main uses: fees, staking, governance, and payments and apps.

• Fees. Every transaction pays a small network fee in ADA. Cardano’s design lets a wallet work out the exact fee before a transaction is sent.
• Staking. Holders can delegate ADA to a stake pool to help secure the network and earn a share of the rewards. The ADA never leaves their wallet and can be spent at any time.
• Governance. Since the Plomin upgrade in January 2025, ADA holders can propose and vote on governance actions directly, or hand their vote to a delegated representative (DRep).
• Payments and apps. ADA can be sent to anyone with a Cardano address and is used in apps built on Cardano, such as decentralized finance (DeFi) services and NFT marketplaces. Since 2021, other tokens can also be issued on Cardano as native tokens.

The coin is named after Ada Lovelace, a 19th-century mathematician recognized as the first computer programmer.

How does Ouroboros proof of stake work?

Ouroboros is Cardano’s consensus protocol. It chooses stake pools to create new blocks in proportion to the ADA staked with them, so Cardano needs no energy-hungry mining like proof of work.

Time on Cardano is split into one-second slots and five-day epochs. For each slot, a kind of lottery picks a block producer, and pools with more stake win more often. Only about 1 slot in 20 is expected to get a block, so a new block arrives about every 20 seconds on average.

Stake pools are servers run by stake pool operators. Most ADA holders do not run a pool; they delegate their stake to one and share in its rewards.

Rewards come from two places: transaction fees and a small share of the ADA reserves, the coins that are not yet in circulation. Each epoch, 20% of that reward pot goes to Cardano’s treasury, which is now spent only through on-chain governance votes.

Cardano’s builders call Ouroboros the first provably secure proof-of-stake protocol. That is a claim about its mathematical design; security in practice also depends on the software and on how widely stake is spread across pools. For the general idea, read what proof of stake is.

What has Cardano’s roadmap delivered so far?

Cardano has been built in five overlapping phases named Byron, Shelley, Goguen, Basho and Voltaire. Each major step went live as a hard fork, a planned upgrade that every node on the network has to adopt.

Plomin went live on January 29, 2025. Since then, ADA holders propose and vote on changes directly or through DReps, alongside stake pool operators and the Constitutional Committee. A Cardano Constitution, refined at a December 2024 convention in Buenos Aires and Nairobi, sets the rules those votes follow.

For the longer story of how the project started, read ADA and the Cardano platform: a brief history.

How is Cardano different from Ethereum?

Both are proof-of-stake platforms for smart contracts, but they record balances, handle staking and make decisions differently. Ethereum used proof of work until The Merge in September 2022; Cardano has used proof of stake from the start.

Cardano’s documentation adds that, under EUTXO, whether a transaction will succeed and exactly what it will cost can be known before it is sent. Neither design is simply better; each makes different trade-offs. Learn more about what Ethereum is.

What are the risks of Cardano?

The main risks are price swings, app bugs, competition, governance decisions you may disagree with, and scams.

• Volatility. ADA’s price can swing sharply within hours, and no company or government stands behind its value.
• App risk. Apps on Cardano are software. A bug or exploit in an app can cost its users money, however carefully the base protocol was designed.
• Competition. Many blockchains compete for developers and users, and Cardano’s future depends on people building on it and using it.
• Governance. Rules and treasury spending now change by vote. Votes by DReps and stake pools are weighted by the ADA behind them, so large holders carry a lot of weight.
• Staking. Rewards vary by epoch and by pool. Fake staking websites try to trick people into revealing their recovery phrase.
• Scams using its name. Fake ADA giveaways promise to send back double what you send. The US Federal Trade Commission (FTC) warns that only scammers promise sure profits or big returns.

Learn the warning signs in common scams in the crypto industry and how to protect yourself from fraud.

How can I buy ADA?

You can buy ADA through a crypto exchange or broker that offers it and keep it in a Cardano wallet you control. Set up the wallet first, because you will need its address.

Coinmama Team

All Posts »